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Growing wealth

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  • Registered Users Posts: 20,389 ✭✭✭✭kneemos


    I know one particular chap who never did an honest days work in his life even though there is nothing physically wrong with him. He qualified for the pension recently which is an actual increase in state benefits every week for him.

    He has his own council house, free medical care and every other hand out you can think of. The council totally renovated the house as well about three years ago.


    He pays rent,plus living expenses out of his dole or pension.
    It's not an extravagant life.


  • Registered Users Posts: 5,452 ✭✭✭valoren


    pearcider wrote: »
    valoren wrote: »
    Blue chip dividends. You'd get circa 3% average after tax so 30k a year. The dividend kings and aristocrats raise their dividends annually so the 30k would grow every year as well. Let's take an annual increase of 10% on that 30k every year. If you reinvested the 30k dividends and added more of your own cash to buy more stock then you accelerate the compounding process every quarter.

    Quick example. Take 10k of the million. Buy something like Altria (aka the old Phillip Morris) and you get 8.3% dividend or $830 before paying 15% withholding tax. When you get the dividend, buy more Altria. Wash rinse repeat with a diversified portfolio of blue chip legends.

    Unless of course you bought Altria in 2017 in which case you’ve lost half your investment.

    Obviously, not all of it would be invested in Altria. It would be stupid to risk the capital on a single stock. The Altria dividend would be buying the stock on the cheap considering it has fallen ie more shares bought at depressed prices. The 10k invested today could drop 50% in a year but you'd still have the $830 locked in so long as the company remained committed to paying out. You'd be looking at buying income not selling for a capital gain. If you had an investment property that you bought for 200k that gives you a practically guaranteed annual rental income of 12k but its market value dropped to 100k then once your aim is to elicit income then the fluctuating market value becomes irrelevant.

    Focus would be on generating dividend income and not capital gain. Any portfolio, no matter how conservative will at some points lose its paper value but the dividend would still be getting paid out. Long term, meaning decades, then investing a million in blue chip dividend paying (and increasing) stocks is a no brainer.

    30 to 50 blue chips (google the dividend kings) with a million equals financial freedom, sleeping easy every night and dividend cash flowing in without lifting a finger. Given the power of compounding then the ultimate aim would be to receive in income the same as what you initially invested ie 10k invested in a stock decades ago that is now paying you 10k in income. A 100% yield on cost.


  • Registered Users Posts: 20,259 ✭✭✭✭dxhound2005


    Mad_maxx wrote: »
    My aunt hasn't left me anything, I was just posing a question about the best way to put money to work should someone ever come into it but thanks for the info

    Judge the advice you are given with caution. Often people who own gold or shares or whatever will push others into investing, so that the asset will increase. You could make a lot of money, but you could also lose by going into shares, property, precious metals, digital currency, fine art and so on.

    The only schemes which will protect your capital are government guaranteed deposit accounts, but the return is very low, and will be eaten up by inflation. Also because financial institutions do not want deposits at present, they have imposed limits typically of €250,000 on how much a saver can have.


  • Registered Users Posts: 16,165 ✭✭✭✭Leg End Reject


    Strumms wrote: »
    That’s mad, so if I go to my bank on Monday, a cheque for 50,000 to be lodged they are entitled to ask where I came by the dosh and if not altogether satisfied then go and ring the revenue ?

    Yes, you could be laundering money, as well as trying to avoid paying tax. The bastards have you every way


  • Registered Users Posts: 6,662 ✭✭✭CelticRambler


    You'd need more than a million to stop working.

    Assuming I live another 50 years (which would be fairly good going, even if both my granddads lived into their nineties), that's 20k a year which is about twice what I need to live on at the moment.

    So I'd spend the first half of it on a property based retirement project that may or may not pay for itself, knowing that I'd still be able to maintain my current lifestyle.


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  • Registered Users Posts: 57 ✭✭nsi423


    pearcider wrote: »
    Unless of course you bought Altria in 2017 in which case you’ve lost half your investment.

    This is true but not relevant to the OP's question.

    Let's say OP bought Altria in 2017 for $70. The dividend in 2017 was $2.54, a 3.6% return before tax, ahead of valeron's 3% target.
    In 2018, Altria paid out $3.00, a 4.3% return for OP's $70 investment.
    This year they look set to pay out around $3.28, 4.7% return for OP.
    OP's invested for cash flow, not capital gain and their income is increasing year on year.


  • Registered Users Posts: 16,165 ✭✭✭✭Leg End Reject


    Assuming I live another 50 years (which would be fairly good going, even if both my granddads lived into their nineties), that's 20k a year which is about twice what I need to live on at the moment.

    So I'd spend the first half of it on a property based retirement project that may or may not pay for itself, knowing that I'd still be able to maintain my current lifestyle.

    What about inflation? €20k won't have the same buying power for ever. Property gains will be taxed to the hilt too.


  • Registered Users Posts: 29,294 ✭✭✭✭Mint Sauce


    A great aunt. So it would probably be about 500-600 k by the time you pay the inheritance tax.

    Probably pay off the mortgage, and invest the remainder.


  • Registered Users Posts: 1,267 ✭✭✭Deub


    Assuming I live another 50 years (which would be fairly good going, even if both my granddads lived into their nineties), that's 20k a year which is about twice what I need to live on at the moment.

    So I'd spend the first half of it on a property based retirement project that may or may not pay for itself, knowing that I'd still be able to maintain my current lifestyle.

    You just forgot inflation.


  • Registered Users Posts: 2,744 ✭✭✭marieholmfan


    Strumms wrote: »
    That’s mad, so if I go to my bank on Monday, a cheque for 50,000 to be lodged they are entitled to ask where I came by the dosh and if not altogether satisfied then go and ring the revenue ?

    Yes ; obliged not entitled


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  • Closed Accounts Posts: 1,497 ✭✭✭ Santino Chubby Munchies


    Mad_maxx wrote: »
    My aunt hasn't left me anything, I was just posing a question about the best way to put money to work should someone ever come into it but thanks for the info

    Grand. Unfortunately there's no way to say what a hypothetical beneficiary should do with a hypothetical €1 million before CAT without knowing more about that person's age, circumstances, investing knowledge, and so on.

    I will say, however, that retaining a financial adviser and handing your money over to him or her is probably the single worst decision a person could make.


  • Registered Users Posts: 3,405 ✭✭✭Ginger83


    nsi423 wrote: »
    This is true but not relevant to the OP's question.

    Let's say OP bought Altria in 2017 for $70. The dividend in 2017 was $2.54, a 3.6% return before tax, ahead of valeron's 3% target.
    In 2018, Altria paid out $3.00, a 4.3% return for OP's $70 investment.
    This year they look set to pay out around $3.28, 4.7% return for OP.
    OP's invested for cash flow, not capital gain and their income is increasing year on year.

    So dont worry about dips as long as dividend is paid?


  • Registered Users Posts: 6,662 ✭✭✭CelticRambler


    What about inflation? €20k won't have the same buying power for ever. Property gains will be taxed to the hilt too.

    Any decent savings account or other low-risk investment vehicle would cover that. Chances are that my expenses will decrease as I get older anyhow - most of what I spend at the moment goes on diesel for long-distance travel.


  • Registered Users Posts: 1,166 ✭✭✭Still waters


    Assuming I live another 50 years (which would be fairly good going, even if both my granddads lived into their nineties), that's 20k a year which is about twice what I need to live on at the moment.

    So I'd spend the first half of it on a property based retirement project that may or may not pay for itself, knowing that I'd still be able to maintain my current lifestyle.

    You live on 10 grand a year ? How


  • Registered Users Posts: 16,165 ✭✭✭✭Leg End Reject


    Any decent savings account or other low-risk investment vehicle would cover that. Chances are that my expenses will decrease as I get older anyhow - most of what I spend at the moment goes on diesel for long-distance travel.

    I'm not sure it would cover it. Are you relying on the current pension not being decreased? 10k is a very small amount to live on for a year, I'm not sure how you do it.


  • Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Instinct tells me buying two luxury apartments in the centre of Dublin would be the best option, cater to the executive type high earning tenant, three grand per month type client


  • Registered Users Posts: 24,670 ✭✭✭✭Strumms


    If I was to be on the end of a windfall, that’s what I’d do, buy an apartment with the dosh, rent out the gaff for a couple of years then sell it.


  • Registered Users Posts: 20,259 ✭✭✭✭dxhound2005


    Any decent savings account or other low-risk investment vehicle would cover that. Chances are that my expenses will decrease as I get older anyhow - most of what I spend at the moment goes on diesel for long-distance travel.

    Not any no risk account.

    https://www.askaboutmoney.com/threads/savings-best-buys.90481/


  • Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Strumms wrote: »
    If I was to be on the end of a windfall, that’s what I’d do, buy an apartment with the dosh, rent out the gaff for a couple of years then sell it.

    Income then diverted into a pension in order to further grow one's wealth


  • Registered Users Posts: 16,165 ✭✭✭✭Leg End Reject


    Strumms wrote: »
    If I was to be on the end of a windfall, that’s what I’d do, buy an apartment with the dosh, rent out the gaff for a couple of years then sell it.

    You'd be taxed on all profits minus expenses, capital gains at 33%. Taxed on rental income too ...


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  • Registered Users Posts: 6,662 ✭✭✭CelticRambler


    You live on 10 grand a year ? How

    By not living in Ireland, for a start! :pac:
    I'm not sure it would cover it. Are you relying on the current pension not being decreased? 10k is a very small amount to live on for a year, I'm not sure how you do it.

    What pension? :confused:

    House is bought and paid for, half my food comes from the garden, every other expense is kept to a minimum by not allowing myself to be ripped off by greedy capitalist corporations. Can't do much about the cost of fuel, though, which is why my holidays account for about half my expenditure. :(


  • Registered Users Posts: 3,368 ✭✭✭NSAman


    The simple fact in ireland is that growing wealth is difficult. 33% transfer tax and other taxes on money earned mean that the average Joe, will not be able to grow.

    I have heard it said that anyone who does grow wealth in Ireland is either doing business internationally or is not being 100% honest.

    I know that is a generalization but it absolutely seems impossible to develop in Ireland compared to other countries.


  • Registered Users Posts: 12,957 ✭✭✭✭Geuze


    Strumms wrote: »
    How will the state ‘know’ of your windfall ? Genuine question.

    Probate process.

    All wills are public documents.


  • Registered Users Posts: 24,670 ✭✭✭✭Strumms


    You'd be taxed on all profits minus expenses, capital gains at 33%. Taxed on rental income too ...

    Hmmmm, they have you every way so it seems.


  • Registered Users Posts: 20,259 ✭✭✭✭dxhound2005


    By not living in Ireland, for a start! :pac:



    What pension? :confused:

    House is bought and paid for, half my food comes from the garden, every other expense is kept to a minimum by not allowing myself to be ripped off by greedy capitalist corporations. Can't do much about the cost of fuel, though, which is why my holidays account for about half my expenditure. :(

    I hope whoever gets your money when you're dead will be equally fastidious.


  • Registered Users Posts: 16,165 ✭✭✭✭Leg End Reject


    By not living in Ireland, for a start! :pac:



    What pension? :confused:

    House is bought and paid for, half my food comes from the garden, every other expense is kept to a minimum by not allowing myself to be ripped off by greedy capitalist corporations. Can't do much about the cost of fuel, though, which is why my holidays account for about half my expenditure. :(

    Sorry, I assumed you lived in Ireland and meant the state pension.

    What if you're unable to maintain your garden as you get older?

    You're in a good position though, I'm jealous.


  • Closed Accounts Posts: 1,497 ✭✭✭ Santino Chubby Munchies


    NSAman wrote: »
    The simple fact in ireland is that growing wealth is difficult. 33% transfer tax and other taxes on money earned mean that the average Joe, will not be able to grow.

    I have heard it said that anyone who does grow wealth in Ireland is either doing business internationally or is not being 100% honest.

    I know that is a generalization but it absolutely seems impossible to develop in Ireland compared to other countries.

    This is all very true.

    These policies are supported by the "tax the rich" socialists, but they really target the average Joe.

    My own secret weapon is a non-domiciled spouse. :)


  • Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    NSAman wrote: »
    The simple fact in ireland is that growing wealth is difficult. 33% transfer tax and other taxes on money earned mean that the average Joe, will not be able to grow.

    I have heard it said that anyone who does grow wealth in Ireland is either doing business internationally or is not being 100% honest.

    I know that is a generalization but it absolutely seems impossible to develop in Ireland compared to other countries.

    This is all very true.

    My own secret weapon is a non-domiciled spouse. :)

    My partner is from Limerick, not sure that will do 🀔


  • Registered Users Posts: 827 ✭✭✭studdlymurphy


    Strumms wrote:
    That’s mad, so if I go to my bank on Monday, a cheque for 50,000 to be lodged they are entitled to ask where I came by the dosh and if not altogether satisfied then go and ring the revenue ?


    Say you won it on the horses like Bertie


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  • Closed Accounts Posts: 1,497 ✭✭✭ Santino Chubby Munchies


    Mad_maxx wrote: »
    My partner is from Limerick, not sure that will do ��

    Probably not, alas :pac:


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